Heard on the Web: Donors Find Gift Annuities Can Stop Giving

Summary

The Wall Street Journal continues to report on the collapse of the National Heritage Foundation and its effect on its gift annuity donors. The message is donors and their advisers should scrutinize the financial strength of issuing organizations just as they would any other investment.

Published in May 2009

"It sounds good on paper: You make a donation to a worthy cause and,
in return, receive regular lifetime payments. But so-called charitable
gift annuities don't always deliver what they promise -- a risk that
could intensify if the recession persists.

For the past several years, Matthew Allen has counted on receiving
nearly $12,000 a month through a charitable gift annuity he set up with
the National Heritage Foundation. That arrangement was upended in
January, when the Falls Church, Va., charity filed for bankruptcy
protection".......

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Comments

As I said in the May 19th edition of the newsletter, THE PLANNED GIVING KEY, the damage is already done. Unfortunately, this sloppy reporting by the WSJ has hurt not only the donors that may have benefited from increased income while helping a charity they care about, it has also hurt the legitimate charities, serving their nonprofit missions and responsibly managing their gift annuity programs. Letters to the editor and op ed opinions are less likely to be read than a blazing headline, especially if it deals with something the reader has been considering. I just do not understanding why the "reporters" were so quick to put forth this misleading article, which served no one.

...With the following statement, "The message is donors and their advisers should scrutinize the financial strength of issuing organizations just as they would any other investment."
Financial Strength matters. Now more than ever.

As you should know, if you are keeping up, both the American Council on Gift Annuities and the Partnership for Philanthropic Planning have aggressively challenged the focus, tone and substance of the WSJ piece. Their replies can be found at www.acga-web.org or www.pppnet.org.
Thank you.
Greg Vranicar

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